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Thursday, July 24, 2025

World Bank concerned over high cost of remittances to the Caribbean

by

20140416

The World Bank has voiced con­cern about what it de­scribed as the ex­or­bi­tant cost of send­ing re­mit­tances to the Caribbean and oth­er places, say­ing that forc­ing mi­grant work­ers to pay as much as US$50 to send US$200 is "wrong."The Wash­ing­ton-based fi­nan­cial in­sti­tu­tion said this is es­pe­cial­ly so when work­ers are "send­ing salaries they have earned in the hope of sup­port­ing their fam­i­lies back home."It said US$200 of­ten is a very sig­nif­i­cant sum for mi­grants' fam­i­ly in­come.

"There was lit­tle price trans­paren­cy and no glob­al ef­fort to ad­dress this prob­lem un­til the World Bank helped form a coali­tion to mon­i­tor the process and cre­ate a 'one-stop shop' in­for­ma­tion sys­tem to help re­mit­tance-senders com­pare ser­vices and costs," the state­ment said.The World Bank said the high cost of trans­fer­ring re­mit­tances in­ter­na­tion­al­ly has typ­i­cal­ly been caused by a com­bi­na­tion of ob­sta­cles in each lo­cal mar­ket, both in send­ing and re­ceiv­ing coun­tries.

These in­clude a lack of trans­paren­cy and con­sumer pro­tec­tion, le­gal and reg­u­la­to­ry ob­sta­cles, a lack of pay­ment sys­tem in­fra­struc­tures and ac­cess to pay­ment sys­tems, a weak mar­ket en­vi­ron­ment with­out a prop­er com­pe­ti­tion, and weak risk-man­age­ment and gov­er­nance prac­tices.These prob­lems were dis­cussed as the World Bank-led coali­tion joined in cre­at­ing a new in­ter­na­tion­al stan­dard called the Gen­er­al Prin­ci­ples for In­ter­na­tion­al Re­mit­tance Ser­vices, pub­lished in 2007.

The World Bank not­ed that in 2009, Heads of State of the world's in­dus­tri­alised pow­ers made a com­mit­ment to re­duc­ing the glob­al av­er­age cost by five per­cent­age points in five years � the so-called "5�5 ob­jec­tive".In ad­di­tion, the World Bank said it has pro­vid­ed a "va­ri­ety of ef­fec­tive so­lu­tions" to ad­dress­ing a high cost of send­ing re­mit­tances at the glob­al, coun­try, and mu­nic­i­pal­i­ty lev­els.

It said the Glob­al Re­mit­tances Work­ing Group that it has es­tab­lished has pro­vid­ed tech­ni­cal in­puts and ad­vice to part­ners to achieve the ob­jec­tive, to­geth­er with mon­i­tor­ing the glob­al re­mit­tance costs through RPW.At the coun­try lev­el, the Bank said it pro­vid­ed tech­ni­cal as­sis­tance to client coun­tries to im­prove their re­mit­tance mar­kets by ad­dress­ing prob­lems and ob­sta­cles through im­ple­ment­ing the Gen­er­al Prin­ci­ples for In­ter­na­tion­al Re­mit­tance Ser­vices.

As a re­sult, the bank said the cost of send­ing re­mit­tances has been re­duced to about US$42.48 bil­lion from 2009 to 2013 at the glob­al lev­el.It said the glob­al av­er­age of send­ing a re­mit­tance of US$200 came down from 9.81 per cent to 8.95 per cent in the nor­mal av­er­age and from 8.58 per cent to 6.62 per cent in the weight­ed av­er­age from 2008.

"Re­mit­tances are proven to be es­sen­tial for the poor not on­ly for their in­come but al­so for fi­nan­cial in­clu­sion, ed­u­ca­tion, health, and in­vest­ments," the World Bank said. "A re­duc­tion of re­mit­tance costs means more mon­ey is kept in the hands of mi­grants and their fam­i­lies."The World Bank has al­so said that re­mit­tances to the Caribbean and oth­er de­vel­op­ing coun­tries are ex­pect­ed to re­main ro­bust this year, de­spite in­creased de­por­ta­tions of mi­grant work­ers.

The bank said mi­grants from de­vel­op­ing coun­tries, in­clud­ing the Caribbean, are ex­pect­ed to send US$436 bil­lion in re­mit­tances to their home coun­tries this year.


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